There is no code of practice that regulates the selling activity of suppliers or third parties, otherwise known as energy brokers, consultants, advisors or agents. With high energy prices and record complaints to the consumer watchdog, how does your business protect itself from being miss-sold an energy contract?
Energy sales are big business and about 60% of all commercial energy is sold through third parties. Contracts are often sold over the phone and the information businesses are given is at best miss-leading and worst a downright lie.
Be aware that as a business consumer you do not have the same rights and protections as a domestic user e.g.
- There is no legal requirement to have a contract cooling off period. Once you have agreed you are committed
- Most business contracts are fixed term, usually between 1 – 5 years and you cannot leave early unless you pay termination penalties
- If you agree to a supply contract over the phone or during a conversation it will constitute a contract even though you have not signed anything
Agreeing to a contract over the phone could prove to be a very costly mistake
How can I spot a rogue salesman?
It is important that you understand your vulnerability and take action to protect your business from any disreputable agency using underhand tactics.
The current one is the caller says they are merely a Meter Registration Organisation but actually they are trying to sell you energy.
Typical statements that get you into a binding contract:
“They are your current supplier and they need to check your details”.
You wouldn’t give out your bank details to a cold caller so why give your energy details to a caller which allows them to talk you into a contract. Your current supplier has all the necessary details.
“Your current supplier has been taken over by them and they need you to agree to a new contract”.
This is a lie. You would receive written notification from your current supplier about any mergers, buy outs or changes.
“You do not have a supplier and you will be disconnected if you do not appoint one now”.
This is common amongst new occupiers of business premises and is utter rubbish. The previous occupant’s supplier will continue to supply you until you decide otherwise.
They claim to check all suppliers for the "best" deal for you.
There are no telesales operations that can get prices from all suppliers. They are usually working on behalf of one or two suppliers and slant their “top three offer results” so that you choose the supplier they want you to choose but infer that you are getting the cheapest deal, when you are not.
You are a new occupier and they quote you expensive prices that you will be paying and offer you much cheaper prices.
This is being economical with the truth. When you move into new premises the current supplier will charge you Out of Contract rates which are the most expensive energy rates that you can have and, therefore, a contracted price from any supplier will always be cheaper. Always compare a contracted price with other contracted prices.
They claim to be the Industry Regulator and want to help you get a cheaper energy price. This is misrepresentation. The Industry Regulator and consumer watchdog would never do this.
They will claim that you have a cooling off period to change your mind.
This is another tactic to get you to agree only to find out that you cannot change your mind. You can only change your mind on a domestic supply.
They get your agreement by stating that they can reduce your direct debit payments by a large percentage.
All they do is reduce your monthly payment by the percentage saving to make it look like you are saving money. Always compare the unit price with the unit price so that you do not have a shock when the monthly payments are increased or there is a massive bill at the end of the year to “top up” under payments. It is likely that if you do not pay these extra charges you will enter into a second year contract by default.
The three call trick is becoming quite popular.
An agent will ring you stating that your current supplier is about to increase the prices they charge you and that they can get you cheaper prices. They offer to contact your current supplier to see if they are prepared to match the price they can get you. Lo and behold you receive a call from your "supplier" on the same day saying that they can't match or beat the prices you are being offered. Guess what? The supplier call is pretence and is made by a colleague of the original caller. You then receive contact from the original agent to get your agreement.
There are TPIs who will visit you and are also less than honest with what they say. Make sure you read all documents carefully and that all blanks are filled in that can be filled in. If you are not sure about anything then DON’T SIGN!
REMEMBER VERBAL CONTRACTS ARE LEGALLY BINDING AND YOU HAVE NO COOLING OFF PERIOD TO RECONSIDER YOUR DECISION
If you are suspicious about the integrity of a caller, take down as much information as you can about the caller and their company, terminate the call immediately